Kerkman doesn’t take WEDA issues far enough

Republican Rep. Samantha Kerkman should be applauded for recommending criminal penalties for those who commit fraud in applying for funds or tax credits from the Wisconsin Economic Development Corporation. But she stops short of addressing an equally serious cause of problems in the organization.

More than one audit clearly indicates that WEDA has serious internal problems. It seems that the leaders of WEDA have decided that they do not have to follow state laws or abide by their own rules all too frequently. An audit by the nonpartisan Legislative Audit Bureau found that WEDA violated several state laws, as well as its own policies, in doling out millions of money and tax credits and that WEDA also failed to verify whether companies actually created the promised jobs. They also revealed that WEDA made 28 such awards between 2011 and 2013, amounting to $126 million, without a formal review of the grants. A later audit discovered more abuse of authority: at least 19 instances where WEDA did not follow state laws in the granting of awards.

So obviously more is needed than just penalizing organizations which commit fraud in applying for WEDA funds. WEDA itself, especially its leaders, needs to face penalties when they fail to adhere to state laws and their own expressed rules when making awards--to assure that they carefully screen applications, diligently review their awards and actively verify whether the recipients actually create the promised jobs.

Recently WEDA suggested that what they need is a revision of their rules. But this is not the solution. We don’t need less stringent rules; we need an organization that competently fulfills its stated mission. If WEDA cannot adequately process and monitor applications for loans and tax credits, and do so in a manner which adheres to state laws and WEDA’s own guidelines, then perhaps WEDA should not attempt to do that job.

In short, while Rep. Kerkman has made a good start in recommending one step to deal with one cause of WEDA’s problems, we need to supplement her proposal with measures which will look inward into WEDA — measures which will hold that organization and its leaders accountable to manage allocating taxpayer funds toward job creation in a responsible fashion.